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Tuesday, January 6, 2015

Elliott Wave Stock Market Update - January 6

The market continued to sell off today to make a lower low at 1992, coming close to the previous significant low of 1972. Which makes the bullish count still viable but getting close to being invalidated if we see another strong bearish wave. The market is already very oversold and there are enough micro waves to call the structure complete. So a bullish wave should come very soon that will give us a better idea of what the market wants to do in the next few weeks.

The excuse for the sell off continues to be oil but like I said yesterday, chances are a temporary or even long term bottom will be found soon. OPEC (Saudi Arabia in particular) continues to play chicken with non-OPEC producers and at some point someone will start cutting production. And make no mistake that this is a supply driven sell off and NOT demand driven, once they have supply cuts figured out oil will shoot back up. I read that just 1 million b/p/d in the market moves oil prices $20, so oil at $70-80 might be back before we know it.

* Trends
are not trade signals. Trends are posted for situational awareness
only and does not take into account wave counts, technical or
fundamental conditions of the market. While mechanically trading the
posted trends is feasible, keep in mind that these are lagging
indicators and as such are prone to whipsaws and I personally do not
use nor recommend them to initiate or close positions in the market
without taking into consideration other factors.